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Overcoming barriers to tendering for the voluntary and
community sector
Matthew Jackson, Head of Research
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What i CLES?
Independent charity
Economic development and well-being
Publishers:
Established 1986Planners, sociologists, geographers, local government, environmental scientists, economists
Hybrid; research, consultancy, members
Leading UK member org for research into Economic development
About CLES
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Objectives
To understand the shift towards contracting
To explore barriers to tendering
To discuss how these barriers can be overcome
To understand different ways of measuring impact
Today
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changing policy environment (a reminder)
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Regeneration and Local Economic Development
Grants AND contracts
Efficiencies AND effectiveness
Place shaping and stewardship
Outputs and targets
Public sector driven and top-down delivery
Tackling social exclusion, inequality and poverty
Primary healthcare
Right to welfare
How we have done policy in last ten years?
Policy themes of last ten years
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Economic growth
Contracts, procurement and commissioning
Cost-saving
Co-production
Outcomes and payment by results
Service pluralism and cross-sector delivery
Job creation
Preventative healthcare and well-being
Welfare reform
How we have done policy in last ten years?Emerging policy themes
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Mainstreaming existing activities
Demonstrating outcomes
Organisational sustainability
The payment by results culture
Government buy-in (centrally and locally)
Supporting the most vulnerable when the policy focuses on middle England
Tendering and competing for contracts
Are there any more?
How we have done policy in last ten years?Challenges – for the VCS
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The shift from grants to contracts
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‘A grant-maker is not contracting for a service that forms part of its own business. It is offering financial support in an area of work designed by the third sector which it wishes to sponsor. The work would add value to the funder’s overall aims and objectives. The organisation retains considerable freedom in the way in which it carries out the work.’
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The importance of grants
1. Operational values
Grants provide start-up capital
Grants stimulate innovation
Grants fosterer partnership working across sectors
Grants sustain organisational ethos
Grants enable the economic viability of organisations
2. Local economic
Grants stimulate local employment and volunteering
Grants fosterer entrepreneurship
Grants add value to mainstream delivery
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The importance of grants
3. Local social benefits
Grants facilitate social interaction
Grants tackle worklessness and deprivation
Grants improve the perception of place and the environment
Grants provide needed and bespoke support services
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Stage 2 – survey
10.3%
10.3%
6.9%
13.8%
6.9%13.8%
37.9%
less than £50,000
between £50,000 and £100,000
between £100,000 and £250,000
between £250,000 and £500,000
between £500,000 and £1million
between £1million and £2million
more than £2million
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Stage 2 – survey
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Viewed as paternalistic
Short term and unsustainable
Does not build capacity
How we have done policy in last ten years?The critique of grants
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Defining Procurement
‘the purchasing by local authorities and other public sector bodies of goods and services’
‘Procurement is the process of acquiring goods, works and services, covering both acquisitions from third parties and from
in-house providers. The process spans the whole cycle from the identification of needs through to the end of a services
contract or the end of the useful life of an asset’(National Procurement Strategy for Local Government)
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The stages of the procurement cycle
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CLES research in Manchester
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Key results of 2010 research
MCC spent £357,382,215.03 upon its top 300 suppliers (08/09)
MCC spent £183,967,557.15 upon Manchester based suppliers (51.5%)
£43,164,744.32 is spent in Ardwick
£87,541,509.18 is spent in Manchester neighbourhoods in 10% most deprived nationally
£309,055,609.74 (86.5%) is spent in Greater Manchester
All suppliers re-spent £89,345,553.76 in the Manchester economy
This equates to 25p in every £1 received
Manchester procurement contributes towards the support of 5225 jobs in the Manchester economy
Range of wider local economic, social and environmental benefits
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Conclusions of Manchester research
Good evidence of policy and practice BUT:
More gain could be achieved for Manchester economy
MCC could influence the practices of the supply chain further
Procurement still viewed as complex and silo-ed
Economic and procurement functions not always linked
Geographical and sectoral gaps in delivery
Significant challenges facing the City
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Implementing recommendations
Cross-departmental procurement working group
Network of suppliers
Engagement with suppliers in area regeneration localities
Spend analysis for financial year 2010/11
Cost-benefit analysis study with Capital Programmes
Outcomes framework development
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Key results of 2011 research
MCC spent £547,382,215.03 upon its top 300 suppliers (53% increase)
MCC spent £294,836,725.96 upon Manchester based suppliers (53.9%)
£68,709,428.04 is spent in Harpurhey
£154,770,295.70 is spent in Manchester neighbourhoods in 10% most deprived nationally (77% increase)
£497,712,492.26 (90.9%) is spent in Greater Manchester
All suppliers re-spent £233,422,039.95 in the Manchester economy
This equates to 43p in every £1 received
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Key thoughts
Procurement is changing – local authorities need to:
Assess the cost benefits of procurement decisions and delivery
Further influence suppliers in delivering community benefit
Adopt centralised procurement but work cross-departmentally
Recognise the importance of small business and social enterprise to local economies
Embed monitoring of spend of part of the process
The challenges for the sector and barriers to tendering
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What do you think are the key barriers to the VCS engaging with contracting?
How we have done policy in last ten years?Task 1
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Public sector procurement cultures
Knowledge of vcs capability
Complex PQQ and ITT documentation
Size and scale of delivery contracts
Organisational capacity to bid and deliver
Demonstrating cost efficiency and effectiveness
Desire and Drive from within the community
Professionalism?
How we have done policy in last ten years?Barriers to tendering
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Overcoming barriers to tendering
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• How do the VCS overcome the barriers to tendering?
• What support is needed?
Task 2
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Demonstrate impacts
Quantitative and qualitative
Promote and communication activities and outcomes
Engage with procurement officers and commissioners
Embed an outcome culture into the organisation
Develop effect consortia
Capacity building within the sector
How we have done policy in last ten years?Overcoming barriers
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Measuring impact
Val
ue fo
r m
oney
Market failure
Rationale
Objectives
Inputs (staffing & resources)
Activities
Net outputs
Gross outputs
Outcomes(including Strategic
Added Value)Impact on original
conditions
Additionality adjustments
Economy
Efficiency
Effectiveness
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Measuring impact
The LM3 model
Round 1 – total spend
Round 2 – spend upon (local) suppliers
Round 2 – spend upon (local) direct employees
Round 3 – re-spend of local suppliers upon their own local suppliers and their own local employees
Round 3 – re-spend of direct employees in the local economy
LM3 = Round 1 + Round 2 + Round 3 Round 1
For every £1 invested £x is re-invested within the local economy
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Cost benefit analysis / Social Return on Investment
Aims to capture the social, economic and environmental value of outcomes
Based around a ‘Theory of Change’ – identification, measurement and assessment of outcomes and their financial values (shadow price).
CBA can be forecasted or retrospective:
What value is a project generating / Is a project actually worth doing?
Which delivery option would generate the greatest level of return?
For every £1 invested £x is generated in social, economic and environmental value
Measuring impact
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Questions?
For further information on today’s session:
Tel: 0161 236 7036
